The LiquidPlanner Blog

How to Use LiquidPlanner to Track Profitability

Are your projects making money?

Every business need to earn a profit to stay in business—that’s a given. And along the way, it helps to have a project management tool that can show you your profit margins (or lacktherof). LiquidPlanner gives you those dollar figures that tell you how you’re doing financially—provided you’ve entered all the necessary data to put those rate sheets to work for you.

How to build out a project to see profitability

First, you need the right data. In order to get an accurate report on profitability, you and your team must do three things:

Without this project data, you can’t get an accurate profit report. But once your project plan is built out with all these elements in place, and everyone tracks their time, the next step is using LiquidPlanner’s rate sheets.

Using rate sheets

Rate sheets let you set up Pay Rules and Billing Rules. This allows you to calculate how much you’re paying out for each resource, and how much each resource is bringing in. While this information helps you manage your resources throughout the project, it also tells you if you’re in the black (and how much), and gives you a profit forecast.

Access to Pay Rules and Billing Rules is limited to workspace owners and co-owners. To find these sheets in your workspace, go to Settings > Data Customization > Billing Rules or Pay Rules.

On the Billing Rules sheet, enter the billing rates. This can be done by person, project or the type of work being done (activity).

Once the rates are set up, the numbers are automatically calculated for work done and work remaining—figures that you can include in your financial metrics based on timesheet data entered by the team.

Here’s an example of rate sheet calculations in a project report that was generated via analytics.

During the planning and execution stages, your profit margins are estimations. The benefit of peering into these prospective net gains (or losses) is being able to reallocate resources or change the project scope before you blow up your budget.

When the project is done and delivered, and everyone’s tracked time, then you’ll have your final profit margin.

Use Analytics to see your profit

Now it’s show-me-the-money time. Here’s how to see your profit margin.